July saw business confidence in Belgium fall to the lowest level since February, with pessimism especially prevalent in the manufacturing and services sectors.
The latest business confidence survey by the National Bank of Belgium (NBB) found that the overall synthetic curve (the average trend in business confidence across industry, business and trade) fell by 1.2 points in July, to -12.3. This brings business confidence to almost as low as in February, when the barometer stood at -12.6.
The NBB noted that the downturn was "most pronounced" in the manufacturing industry and in business-related services, where confidence fell by 1.8 points and 1.4 points respectively.
In the manufacturing industry, business leaders were more negative in their assessments of the current order levels. They also assessed stock levels less favourably. Their expectations for employment also deteriorated, having risen "robustly" in June. By contrast, manufacturers did have improved expectations for demand in July.
For business-related services there was a "gloomier" assessment of current activity in contrast to June, with business leaders much more cautious in their activity expectations. Concerns grew among trade businesses that orders would fall as demand expectations dipped. However there was a significant improvement in employment expectations.
Uptick for construction industry
The construction industry was the only sector to see improved confidence in the business environment. The sector's barometer score rose by 1.8 points, something the NBB put down to a "sharp improvement" in assessment for orders.
The overall synthetic smoothed curve, which has a two-month delay compared to the more immediate synthetic curve and reflects underlying economic trends, is leaning towards a stabilisation in business confidence.
The central bank also highlighted that among manufacturers, the amount of their total capacity being used in July rose to 74.2% (from 73.8% in April).
